A Kink in the Hyperloop

One person who’s confident about the company’s prospects is the author of the Forbes article that put it on the map, Bruce Upbin, who in May joined the company as its vice-president of strategic communications.* Pishevar, who has said that he expects there to be a working passenger hyperloop, somewhere in the world, by 2021, insists that the company is stronger than ever, and he shrugs off the suit, which is ongoing, as a speed bump he doesn’t spend much time thinking about. “I think this idea is bigger than any one person, including myself, and in many ways this is a movement, and anyone that begins to feel like they’re indispensable, or that they’re bigger than the idea, doesn’t fit the culture anymore.” He mentioned famous founder schisms at other tech companies. “The people that we sometimes start our journeys with are not the people we end the journeys with.”

But in Silicon Valley, traditional venture capitalists have for the most part steered clear of the company, finding it too speculative, capital-intensive, and long-term to meet their investing criteria. (An exception, Vinod Khosla, told me he was “only a token investor.”) “Most people thought it was not a scam but a fantasy,” says a seasoned Valley insider who knows the players and who allows that Pishevar’s enthusiasm is genuine: “He believes this bullshit.” The lawsuit hasn’t helped. “No one was taking it seriously. Now it’s like, Who are these clowns?

“He reminds me of Voltaire,” says Kara Swisher, co-founder of Recode and a fan of Pishevar’s, referring to the philosophe’s ever-sunny Candide.“People get attacked and there’s war, and he’s like, ‘All for the best, in the best of all possible worlds.’ ” As we walked around the neighborhood near the company headquarters, Pishevar stopped to hand a few crumpled bills to a homeless man on a crate, and pointed out a retro typeface on the old Sears building. “When I look at cities now, I don’t see them in the present,” he said. “This is the decaying infrastructure of our existing cities. Years from now, none of this is going to be here. New cities are going to rise.”

Maybe the best thing going for hyperloop the concept — if not Hyperloop the company — is that Musk has not abandoned the idea. At last summer’s Code conference, a month before the lawsuit was filed, he said: “I think if the companies that are trying to make it happen now, if for whatever reason that doesn’t work out, then I think, you know, I’ll, I might do something myself in the future.”

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Leaked Hyperloop One Docs Reveal The Startup Thirsty For Cash As Costs Will Stretch Into Billions

Despite announcing a $50 million investment in mid-October, Hyperloop One plans to raise as much as $250 million in its next funding round early next year and is already seeking tens of millions in new financing, according to an investment document obtained by FORBES. Meanwhile, according to another company document, internal estimates of the cost of Hyperloop One projects could greatly exceed predictions from the concept’s architect, billionaire tech industrialist Elon Musk.

The documents paint a picture of an “aggressive” expansion plan at Hyperloop One, the startup established by investor Shervin Pishevar, which has raised $160 million so far and is attempting to bring Musk’s vision to reality. Hyperloop’s One’s expansion plans reveal widely varying projected costs for systems that are expected to carry freight by 2020 and passengers by 2021. The company is also forecasting sky-high profit margins for itself and its partners by 2030, according to one of the documents.

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The Hyperloop is turning out to be much more expensive than Elon Musk expected

Hyperloop One is already seeking more funding for its high-speed transportation system, a project that’s turning out to be more expensive than initially thought.

That’s according to new investment documents obtained by Forbes’ Alex Konrad and Alan Ohnsman, which reveal the company is planning to raise $250 million in early 2017.

Less than two weeks ago, the Los Angeles-based company secured $50 million in a funding round led by DP World, the third-largest port and terminal operator in the world.

While the project is still on track to launch by 2020, Forbes reports, it’s much more expensive than Elon Musk — who initially came up with the idea for the Hyperloop and open-sourced it — had predicted. While Musk proposed a total cost of $6 billion for the Hyperloop in California, Hyperloop One’s system would cost between $9 billion and $13 billion just in the Bay Area, according to Forbes.

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